Tomorrow is the last day of Fed buying, then the training wheels come off.

Mortgage Bonds opened lower this morning but moved to back near unchanged levels Tomorrow’s data includes Consumer Confidence and the Case/Shiller Home price Index. The Mortgage Backed Security purchase program ends on Wednesday.

Mortgage Bonds were able to gain back some of the losses from mid week as traders and investors were bargain hunting during the session rates regained some of their early losses from this week

The Bond market fell off a cliff today led by global sovereign debt woes, the nearby exit of the Feds MBS purchase program due to end next Wednesday and the weak auction results caused intererst rates to raise today .875 bps in cost

Closing Market Update

Mortgage Bonds closed 22 BPS higher today.The dollar reversed course today and moved lower helping to push commodity prices higher. That along with higher stock prices in the health care sector, helped to move Stocks into positive territoryThe close above resistance for the benchmark 4.5% coupon sets a positive tone for tomorrow’s trading